The Treasury

Global Navigation

Personal tools

Notes to the Financial Statements (continued)

Note 10:  Interest Expenses
Forecast Actual
Original
Budget
$m 		Estimated
Actuals
$m 		30 June 2008
$m 		30 June 2007
$m
By type  
1,671 1,864 Financial liabilities classified as amortised cost 1,297 1,328
17 2 Financial liabilities classified as held for trading 1 11
647 1,064 Financial liabilities classified as fair value through profit and loss 1,717 1,528
413 24 Interest unwind on provisions 86 18
2,748 2,954 Total interest expenses 3,101 2,885
By source  
2,245 2,527 Core Crown 2,460 2,330
306 275 Crown entities 248 265
704 734 State-owned Enterprises 870 685
(507) (582) Inter-segment eliminations (477) (395)
2,748 2,954 Total interest expenses 3,101 2,885
Note 11:  Insurance Expenses
Forecast Actual
Original
Budget
$m 		Estimated
Actuals
$m 		30 June 2008
$m 		30 June 2007
$m
By entity  
2,965 4,001 Accident Compensation 3,423 2,880
37 82 Earthquake Commission 130 77
8 12 Other 10 18
3,010 4,095 Total insurance expenses 3,563 2,975
By type  
Claims expense 5,257 3,590
Outwards reinsurance premium expense 36 31
Movement in unexpired risk liability 298 115
Other underwriting expenses 93 83
Total claims and other expenses 5,684 3,819
less actuarial gain/(loss) (1,709) (481)
less operating costs relating to claims (412) (363)
Total insurance expenses (excl gains/losses and operations) 3,563 2,975

Claims expense is the sum of claims settled and claims management expenses relating to claims incurred plus the movement in the outstanding claims liability.

Total claims and other expenses are those related to claims that have occurred prior to reporting date. Within these expenses are expenses relating to actuarial gains/(losses) and operating costs (e.g. costs for processing claims and injury prevention promotion) which due to their nature are reported elsewhere in the statement of financial performance eg. under gains/losses or personnel expenses.

Insurance expenses represents underwriting expenses less those expenses reported elsewhere i.e. insurance expenses largely comprise direct settlement of claims and expected movements in the outstanding liability and unexpired risk liability.

Note 11:  Insurance Expenses (continued)
Actual
30 June 2008
$m 		30 June 2007
$m
Net Underwriting Result  
Premium revenue 2,804 2,552
Recoveries revenue (inc reinsurance recovery) -  - 
Underwriting revenue 2,804 2,552
Less claims and other expenses (5,684) (3,819)
Net underwriting surplus/(deficit) (2,880) (1,267)

The underwriting surplus/(deficit) represents the net effect on the statement of financial performance from claims incurred prior to reporting date. It includes actuarial gains/(losses).

Underwriting revenue is reported separately in the financial statements under other sovereign revenue.

Actual
30 June 2008
$m 		30 June 2007
$m
Operating cash flows associated with the underwriting result are:  
Cash receipts 2,647 2,492
Cash payments (3,041) (2,776)
Net operating cash flows (394) (284)
Page top